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Indiana Gas Company, Inc., and Southern Indiana Gas & Electric Company v. Indiana Utility Regulatory Commission, et al. - 4/11/17

4/11/17 10:00 am EST

10 a.m. 93A02-1604-EX-00943. Appellants/Plaintiffs, Indiana Gas Company, Inc. and Southern Indiana Gas & Electric Company (collectively, “Vectren”), appeal the appellee, Indiana Utility Regulatory Commission’s (“the IURC”), denial of their petition to update their seven-year plan under the Transmission, Distribution, and Storage System Improvement Charges and Deferrals statute (“the TDSIC statute”).  Traditionally, a utility’s rates to customers are adjusted through periodic rate cases.  However, in 2013, the Indiana Legislature enacted the TDSIC statute, Indiana Code §§ 8-1-39(1)–(17), to allow utilities to recover their expenses for replacement gas transmission, distribution, or storage projects in a timelier manner.  Under the TDSIC statute, a utility may recover 80% of capital expenditures and costs approved by the IURC, although it must wait to recover the remaining 20% during its next rate case.  In order to recover the 80% under the TDSIC statute, a utility must create a seven-year plan for its eligible transmission, distribution, and storage improvements and must get approval from the IURC for the plan.  Indiana Code § 8-1-39-10 lists the requirements for the contents of a petition for a seven-year plan and for approval of such a plan.  A utility may then petition for an “update” to the seven-year plan under Indiana Code § 8-1-39-9.

Vectren filed a seven-year TDSIC plan in 2013, which the IURC approved.  The original plan included project-by-project details for the first year of the plan and project cost estimates for years two through seven. Vectren and the Indiana Office of Utility Consumer Counselor (“OUCC”) agreed on an update procedure by which Vectren would “move [its] upcoming year-specific projects into a work-order level of detail,” similar to that which it had provided for year one.  On October 1, 2015, Vectren requested approval for two projects it had not listed in its original seven-year plan.  Vectren contended that it could not have predicted the necessity of the projects when it sought approval of the seven-year plan.  The OUCC and the IURC did not oppose the need for, or cost of, the projects, but the IURC denied Vectren’s petition for the updates on the premise that it did not have the authority to approve projects that were not part of Vectren’s original seven-year plan.

On appeal, the parties ask us to determine whether a utility may add qualifying new projects to its existing seven-year plan under the TDSIC statute’s update process.  Vectren also raises the issue of whether the doctrine of res judicata prevents the IURC from revoking its earlier approval of Vectren’s update plan for its seven-year plan.  Indiana Energy Association has filed a “friend of the court” brief that aligns with Vectren, and Industrial Energy Consumers, Inc. has filed a “friend of the court” brief that aligns with the Appellees-Defendants, the IURC and the OUCC.